Local Unemployment and the Earnings-Assimilation of Immigrant Men in Sweden: Evidence from Longitudinal Data, 1990-2000

Abstract

The earnings-assimilation of first-generation immigrant men in Sweden was analyzed using eleven waves of panel-data, 1990-2000. Employment-probabilities and earnings were estimated simultaneously in a random-effects model, using a quasifixed effects to control for both individual effects and panel-selectivity due to missing earnings-information. Assuming equal-period effects produced bias which could distort the findings. To correct the bias, local unemployment-rates were used to proxy for changing economy-wide conditions. Labour-market outcomes differed consider- ably across immigrant arrival cohorts, region and country of origin, and educational levels.